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Combined, these airlines have around 2,500 aircraft in their active fleets. So, 72 grounded airplanes might not seem like it’d have much of an impact. However, those 72 aircraft were scheduled to operate more than 2,000 flights per week. When you consider aircraft seating arrangements, that’s more than 355,000 flight-seats that are suddenly being pulled from capacity, leaving a logistical nightmare for airlines as they try to swap other aircraft in to replace the grounded ones.

We checked in with airlines to see how these US airlines are dealing with the 737 MAX grounding.

In This Post

Southwest

Southwest was the first North American Boeing 737 MAX operator and currently has the largest MAX fleet of any airline in the world with 34. However, with a vast total of airplanes at its disposal, 754, Southwest doesn’t expect much of an operational impact.

A Southwest spokesperson confirmed that “the MAX 8 only operated approximately 4% of our daily flights” and that the airline will “strive to operate our MAX flights on other available aircraft.”

Midday Thursday, one of Southwest’s 737 MAX was in the air — positioning from Newark (EWR) to Orlando (MCO), without passengers.

Since Southwest didn’t share the number of cancellations forced by the grounding, we checked FlightAware’s cancellation tracker. Through 4:15pm ET Thursday, Southwest has cancelled 324 flights. However, many of these are likely due to inclement weather. In addition to these cancellations, Southwest already has cancelled 163 flights for Friday and 99 flights on Saturday.

American Airlines

The world’s largest airline — and the second-largest operator of the 737 MAX — has provided a detailed report of what’s going to happen to its 737 MAX aircraft during the grounding.

According to an official at the airline, AA expects to cancel around 85 flights per day due to the grounding. AA is rearranging its flights to try to limit these cancellations to routes that have multiple flights each day, rather than cancelling the only flight to a destination.

22 of the 24 grounded 737 MAX in AA’s fleet are being repositioned for temporary storage. American Airlines has confirmed that these flights will only have flight crew on-board — no passengers or flight attendants. The flights will operate with a 96XX flight number. Four of these flights were in the air at 3:30pm ET:

The large number of aircraft being stored at Tulsa makes sense, as American Airlines has a massive maintenance base there. However, besides Boston — which typically has 4x scheduled 737 MAX flights a day — no other airports have scheduled AA 737 MAX flights. That means that AA will have to ferry these aircraft from these airports when the grounding is resolved. It seems the airline has calculated that the cost of parking these aircraft at these other airports would be cheaper than storing the planes at airports where it usually flies the MAX.

United

While Southwest and American Airlines use the same MAX 8 version that was involved in both the Lion Air and Ethiopian crashes, United has a small fleet of the larger MAX 9 aircraft.

A United Airlines spokesperson told us that the airline plans to deal with the grounding by “swapping aircraft” and that it is “planning on covering all flights at this time.”

TPG‘s resident United expert Zach Honig found that — while some formerly-MAX flights were being upgraded to larger aircraft, in one case with Polaris business class — there was at least one cancellation of a planned 737 MAX flight “because of an unexpected operational issue.”

According to FlightAware’s cancellation tracker, United has cancelled 152 flights through 4:15pm ET Thursday — but many are likely due to weather. However, the airline has only cancelled 10 flights Friday and just one United flight is cancelled so far Saturday.

Financial Impacts

During a slow period, US-based airlines may be able to handle this grounding in the short term with little impact to operations by utilizing other aircraft or rebooking passengers onto existing flights. However, this grounding is happening during a mini-peak period of travel as families and students head off for spring break trips.

While no airlines have shared the financial impact of the 737 MAX grounding yet, the numbers could be large. Using these airlines’ published Total Revenue per Available Seat Mile (TRASM) for 2018 and the total Available Seat Miles (ASM) that these airlines had scheduled on 737 MAX aircraft, here’s an estimate of how much revenue these airlines could be losing each week from this grounding:

Southwest: $30.5 million

American Airlines: $19.1 million

United: $11.7 million

Note that this is just an estimate, as it assumes that TRASM for the 737 MAX is equivalent to the average for the entire airline’s fleet for 2018 and that the reduction in available seat miles reduces revenue by a proportional amount.

In an investor alert sent out Wednesday afternoon, Raymond James analysts pointed out that airlines are going to have a negative hit to their financials in another way: cost. Replacing the MAX with less fuel efficient aircraft “likely places additional pressure on costs as well as operational stress.” However, these extra costs are likely going to be “recouped from either insurance and/or Boeing.”

Know before you go.

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